reality that income inequality has grown hugely in the united states and the western industrialized world and indeed around the world and about a lot of the action is at the very top; is that better? okay. i'm so short of have to move the microphone. a lot of the auction is at the very top of the income distribution. so, to just give you a quick sense of how things have been changing i will give you a few quick numbers. ..

>> that is also pretty big interestingly, as a surprise, i sold my book to the publishers september 2008 before the by banjo crisis. then it have been to and many people were sad. i thought the entire premise

of my book is gone. the super e lead to is over the crisis as happened surely this will change completely and of which will be wiped out there will be a new calibration so i wrote to a new book proposal but talking to the publishers they said the old one will work. the data has borne that out i talk about the 1% recovery. look at the economic recovery, the numbers within tuned income distribution and a couple of the economist with income it distribution they have crunched the numbers through

2009/2010 but 93% of the income recovery went to the top 1% and even more astonishing was 37% of the recovery went to the top zero plays o%. they were hit particularly hard because they had financial assets. but that is a pretty big rebound and amounted about 4.2 million per family. why is there polarization and different views about the world? because they are very different worlds. having said that, my premise isn't the case the super rich have been with us but

actually there is a reluctance particularly in america, i am canadian so i see with a little bit of a distance, in america there is a reluctance to talk about the income distribution of. one of my friends was supposed to be here tonight i talked to him about this and he said a was once told by the head of a prestigious think-tank they were unlikely to find any work that had wealth inequality in the title. they could finance anything with poverty elimination but that was a different matter.

why? because the party of some people put be in a warm glow. charity is a good thing and many ethical points earned all the tiny amounts are given to the four but every mention raises the issue of the appropriateness or legitimacy. that is true even with the discussion generally a lot of action is in the top 1% people get anxious and with the publication of my book bill daley was on the panel and he started the talk by saying i guess it is okay.

and i said yes. it is okay. what is causing the big gap? year rather obviously the people who are most interested 10 to be on the left. they like to talk about the political driver. how taxes have fallen comment the culture becomes more open to high ceo compensation. deregulation, but it is a real mistake to ignore the economic drivers. there are very powerful economic drivers that are

obvious. globalization, a technology revolution. it is keira -- clear though-- those are key drivers because of the global phenomenon. american discourse tends to be american. would raise a income of inequality with one lot past and that eighties how does that rise in canada? france, germany, united kingdom? it is important to face that squarely. as a political phenomenon the challenge is the benign forces i am a google addict but they are drivers of

social and political consequences. i like to look at it from a quote from peter orszag that the big drivers are economic forces particularly in the united states politics to mitigate these economic forces has exacerbated. so to create much more concentration will try to soften the blow. instead it is the excel arab. who are the super rich? what do they think about the rest of us? the way i will lead characterize them is the seventh global of flood

geeks. this is like the downtown abbey said the. their hard-working people. but you have less leisure at the top men in the middle. hard-working people tend to think of themselves as self-made. i use that as a loose concept. like bill gates orman romney but you made your own business you do not inherit that business that may do the multimillionaire. it is important for now one of the things i found interesting that this is the

age of mastery of members. that seems to make sense when you think of silicon valley or wall street but in your minds iu imagine the russian oligarch you imagine somebody in a fancy italian suit to and this is true but he probably has a ph.d. in math or physics. this is true the chinese, or the indians and this is another key characterization that is different because the capital flows are global their living global lives. we are people who know flight attendants better

than our own lives this shows you're you are not a true plutocrat are you have your own plane. [laughter] said to exaggerated said my husband lives in york to talk about the new york culture and i said the issue has been no? she said his feet cannot touch the sidewalk in new york a car pulls up and takes into the office then they take into his lunch the back to the office and back home. the we place he walks is davos because the streets are so crowded. it also has the downtown ambience. the streets are so crowded

it is faster to walk. so there really global. what is their relationship to the rest of us? it is complicated. even as a 11 the period of the divide as big as it has been and bigger than ever for who was the richest in history with the middle ages the conclusion is the richest person who has ever lived is carlos but interestingly culturally the gap is masked.

speaking to a group of m.i.t. students what does it feel like to be a billionaire? after all it cost the same amount of money for you as it does for me. i interviewed eric schmidt when he was still the ceo of global. his office is no longer than the podium to the armchair. with the small office and it as a journalist real like to set up to people to get them to disclose their secrets. that you are still an

engineer. anybody else on the floor need space to work. so here he is a small office anyone can use the office. he said one paying it is not allowed to have a driver. you could have a private jet you are not allowed to have a driver. so there is not really a gap but to turn to the russians there is a very revealing moment from the russian oil

tycoon at this moment the richest man but he is in a bad mood. this is what he said to me about oligarchs. if the man is not the oligarchic something is not right with him. everyone has the same starting conditions. and he really meant it and was criticizing himself because he lost a couple hundred million dollars because he entrusted a non oligarch and by a definition had allowed the loss of a few hundred million dollars. there is thinking of a lot of these guys there are

strong parallels with the industrial revolution there is a line from andrew carnegie that is very similar. the talent is rare among men that secures the enormous rewards no matter where are under what condition. experience can be explained as not only the first consideration that render the scarcity of his capital. for such men soon the create capital and enhance of the special talent required there is that will element.

interestingly given the since they are self-made the alpha -- alpha-geek position that it midways a few places where i observed is talking to people in this group of the calling of the american middle-class. i found a lot of people coming economic inevitability and not necessarily bad. so and greenwich based hedge fund manager with a liberal arts college said the low scale a miracle worker said

it is sad but it is true. the american based ceo told me about a conversation quite often people could tell me things and my kids do that. but the transformation of the economy and meanwhile what america and drops out that is not a bad trade. i spoke to the cfo of but technology company as a person that was tied with these born and told me his parents told him that they

were temporarily pour. imagine that. sure enough him and his brothers are both rock stars and avid members of the club now they find it. one does silicon valley the other does derivatives on wall street. his parents were angry because he dropped out of the ph.d. program of applied map after going to harvard. very smart and it did great and this is what he said. we demand a higher paycheck and the rest of the world. said you need to deliver 10 times the value. it sounds harsh but people in the middle class need to decide to take a pay cut.

similarly was when i heard about the financial crisis. i expected wall street to feel guilty and realize you don't tell the truth to the reporter but they are off the record. almost invariably they did not blame themselves. this ceo told me sincerely he did not feel guilty for the crisis the culprit was his cousin who owns three cars and paid too much money per what he could afford. a hedge fund guy told me the same thing.

with a leverage buyout he is a good golf caddy but he bought three condos. that means a certain distance from the middle class. with the obama phenomenon is the growing sense how can they feel victimized? there is a man named dan who was an activist investor.

becoming the ceo of yahoo! but december 2010 he said to be mailed to his friends and the subject heading was battered wives. to except the and abuse of president obama the email says written in the voice of a battered wife he really loves us when he hit the seed is not needed and most of the time the bruises do not show. seriously. another man named tj rogers investor of a semiconductor company said he feels the victim and -- victimization of the super turk -- super rich is so extreme they are like the depressed ethnic minority.

the president should be ashamed to treat them this way because he knows what it is like. truth. for the hitler analogy? it is just commonplace. with a carried interest is a particular benefit famously comparing himself to invading poland and then as part of getting my book out there which by the way there are so many parallels with the rise of barack obama and

hitler. he said i did not mean to compare them but there are a lot of parallels. it is very commonplace. the other concept that was astonishing is the sense that the middle-class that taken for granted not being treated that well so i would like to introduce you to the concept of self tax foster friess is a wyoming mutual-fund investor and you may have heard him because he was the chief backer of the rick santorum super pac. i asked him about taxes and

does he think rich people should pay more? he said people the realize how will the people self tax. one ceo of target in phoenix, arizona he has created a museum and has put around 200 million of his own money another friend gave 400 million to a health facility in nebraska, minnesota. bill gates paid 750 million i think to fight aids. we should get rid of touch it -- taxes as much as we can see you can descend have to spend your money rather than the government if you have a certain cause if you want to support it it would be nice if you have the choice for we're headed you'll be taxed in your money taken away it is a question. do believe the government should take your money and spend it for you? forty-one to spend it for you? he went on to say actually

it is a surge to tax the productive billionaire guys because of everything they do for us. look at steve jobs, bill gates the government ought to pay them. why they collect money for what they have contributed? he also talks about the 47% and how dangerous they are. so that is a very familiar concept. in a way that this super rich and the way it feels that there is a more fragile connection but in conclusion

i just want us for one moment to put this in the 14th century. then this was one of the biggest cities did europe. that is remarkable. geographically it is such a yucky place. foggy, the speedos, lagoons, the only reason the italians ended up there they were chased off. is incredibly rich state sending traditions to china controlling demands and how did they do it? this fabulous rise to the

most economic open system of that time. with a particular form of contract system if you would take on risk if he did not have capital you could share in the deal with a partner did and go on a mission the guy who did not have capital to risk his life but share of the profits. this was the reason you had the wealth of that is. but in the 14th century the guise of the top realized this is a little uncomfortable you had your capital hague out at home but you did not want to go to china the do guys for coming up pushing you out of the elite sedate introduced

the official book of the oligarchy if you were in it you were ruling a oligarch not just historians today this is the moment they closed their society but at the time the nation's felt it was a closing of the system calling the closure. is an important story it says economies that are robust to have a mayor credit rest that can make money the guy who gets to the top of not have that incentive and they might be tempted to tilted in their own favor. when i was writing my book i

talk to economic historians and we all agreed the economic transformation is similar to the industrial revolution the same vigorous economic growth but difficult social consequences most economists would say in that medium turn the wall be okay. so then to say if the long run we all dead but another answer is to remember the social and political accommodations made it okay for everybody it was two world wars, a great depression a communist revolution and did the

united states trust busting and the new deal with the entire re but we forget the extent the way it did not exist 150 years ago. people were scared and did not know what they had created and worse scared enough to be invented invented -- inventive. my conclusion is to say we're and that comparable air right now where there is the super e lead to the people in the middle are hollowed out and read someone who is inventing all of those institutions.

thank you very much. [applause] >> that was terrific. i have been joaquin 42 coming years since it saw you on bill moyers. you talk about the plutocrats the ordinary people who were losing and very a great at four people they the that the government is wasting their tax money they don't have much to do with those they feel are causing the problem. 1932 they have no difficulty to figure out who was at fault.

i grew up in the '50s and '60s you cannot even imagine we were building on the basic foundation now the new deal itself is under threat why don't they realize? obviously the republicans want them to but why do they believe that? >> elizabeth warren say the corporations are to blame we need to have a fair society and it will work better but she is that they get tough time in massachusetts. she is barely ahead. why? >> i will offer two ways to

think about it. i do think especially before the crisis than there should of plutocrats and have low fable grind them into their boot to but what i would describe busy intellectual establishment to buy into the notion that the regulation will work and my favorite that went back to look at it kind of horrified me but in january 2007 mike bloomberg and chuck schumer

commissioned a report widely york was falling behind and to read this report is shocking. the single biggest thing holding the economy is overly harsh regulation on credit derivatives have any less regulation of the rise london will take over global finance. and everybody agreed. eliot spitzer, he was quoted by saying how great it was a and chuck schumer one of the sponsors and even critics said this report shows they are spending far too much

money on the and a chess so there was the widespread bipartisan end thought that played a very vague role. and a big difference between now and the response to the industrial revolution is people no government and they do not necessarily like it. americans like it less than bet native canadians with the british choosing and a chess as a symbol now i will refer you to another broke called the severed state by a woman who is a political scientist at cornell. what she argues there is a

bipartisan deal to hide funding of state services the only way democrats could get state services funded was to farm out. the results is that americans don't recognize government does good things for them. >> the attitude toward the political rats in europe to the extent that you talk to those people do you have the same undercurrent of resentment the game the bear 10 plutocrats got it right?

or are they more in my and? >> there is general and the among the plutocrats of the rest of the world. they feel it is very good to be from singapore also monaco. but the europeans feel actually george soros said the great thing about being rich and america and america they look up to you but not necessarily a europe. but similar attention is evident to a drop so we have been falling france and the top of a doubt that 70% and then they say that for tax purposes but in switzerland

interestingly there is a huge national revolt against the super rich so there are similar tensions but there is the more extreme dynamic. >> which u.s. government policies perpetuate the transfer of wealth and the top 1% and could you rank them in importance? >> that would take all night >> please address the tax inequities between air did come and capital gains the federal reserve's policy of lower interest rates and the

of this this of spending rather than saving and the reward given to borrowers rather than saver's spirit that famous line from harry met sally i will have what she had. i would single out the carried interest. that is amazing. also four years of a democratic president he has not managed to build that back. how can that be? also would is amazing i have yet to talk to a private equity% of matter how their barrel. they serve did the. added ministrations. you talk about this. is fabulous but it is unfair.

they are adamant it is absolutely morally and and raged. not because it makes such a difference if you are paul ryan use say come on. it does not make much of the difference but the injustice is in reaching. also regulation. the tick related industries where it is based on obligatory framework what was the greatest rip-off of the american middle-class the regulatory failure leading up at 2,008. i don't the candidate is the perfect country there are many problems but when

counterexample the show's the distilled regulate the bankers is canada they did not have a financial crisis just because regulators said no to the bank's. it was hard. talking to authorities finance ministers said we were so upset with the rest of the world i went to beijing and it tidies said your canadians are so conservative. i amatory and the communist chinese are telling me i am too soft? [laughter] but they held belied. i give them some much credit. average wealth for families

is higher than the american family. to talk about the rip-off is failure of bank regulations. >> one more quick question? >> i am sorry. one of carlos say against books i assume they work on this because my question is the recognition these people have how much they depend on the rule of law with public purse structure and public treasury saving them. said to talk about the psyche of their fortunes based on political

stability. >> of course, it varies but i was surprised there was also ayn rand and john paul fantasy. i was surprised that that was current. is it actual effort to build the gold goal to. the paypal guy is one of the founders it is more beautiful and you could make it up from milton friedman grandson. they're trying to the -- bill the island's in international waters where no laws apply. you could go and create your kind of world. there were some people and a

do quote them in my book when a bomb gave his speech last fall the fdr commonwealth club speech, immediately there were investor notes that a plan that was discovered and all of the rich people should with there. more than you would take a very ayn rand type of sense you got this with foster friess, meant he gives them so much we are the job creators. also zero gary gensler was speaking with great passion and pleasure had there been

the transparency they dislike london trades that loss jpmorgan monday would be much more of visible i could not resist. i said is jaime dae may grateful to you saying they do? he said i do not expect them to be grateful. our interests are different. >> something you said earlier brought back the words of the latin american priest i gave to the poor they called me as eight i it asked why they had no food and they called me a communist. talk about the personal politics of the super rich. did you find anything surprising war counterintuitive of the

personal politics of those that you interviewed? >> i have shared most of it but the democrats still have a hard time when you touch on the areas of self-interest they have a hard time to see passed it. the only other thing i would say someone who is interesting seattle-based investor built a bunch of software companies the title i have forgotten but he says the reason you have this emotional reaction of the billionaire class and the

extreme sense of victimization he thinks it has been so central to feel not only affluent but also righteous. particularly cents in the reagan era there has been the equation to be a successful business person contributing to the social good. so the big balance was a measure of your virtue. the richer you were, the better person you were. now as a quote it is very good. >> that is so great. if you are rich and don't have to feel bad, you can feel like i deserve to be rich because i a did bill

that myself and i had done good things for everybody else and they should be grateful to me. that is such a comforting place to be. and that is being challenged. i don't think the president's rhetoric has been harsh but talk to the rich guys. every single one thinks it is harsh. it sounds harsh because this place is very painful of absolute virtues. >> the picture that you present so well so eloquently to increasingly dominate by a concentrated

groups of political power and cultural power, is separate from the rest of humanity, i saw this with bill moyers interview to suggest a return to the new deal politics that it is rejected not as a possibility. we cannot reverse the trajectory. howled can this situation be improved or regain its footing? what would you recommend? >> not as a cop out but there is work people have to do. it is a mistake to say let's

go back to the 1950's because those jobs don't exist anymore. not enough. people say this is the return of manufacturing. have you looked at the wages that arcade in the trade? fifteen dollars. >> but is weeded and norway the salaries are very high. >> norway is different. sweden and germany. >> i will lead be careful about yearning for japan. speeded and denmark and germany with what they have done between labor and capital and society with the ledger reaction instead of laying people off everybody

takes a pay cut. it takes social unity that have that but it will take more than going to the social democracy of northern europe because you also appeal the tensions in those countries you would be surprised about this whole discourse you could have the same discussion in berlin and stockholm particularly in berlin because the germans realized they hollowed the middle-class of the rest of europe. they are the tide of the you. the only other things that i may say is one senior european goldman sachs man who is in my book send me

e-mail i opened it with trepidation. i thought oh my god. paraphrasing he said i have read your book. terrifying. i think i will have to move to sweden. even the goldman sachs wrap says the swedish model is the only one that works. [laughter] >> i don't know how to phrase the question bet did you see any difference from those who did create something the oligarchs like bill gates or steve jobs. compared to those on wall street that i call for pay for manipulators. is there any difference of their attitude?

bill gates does not be gave as if he is entitled but i do not know him personally but he does a lot with his money that is good. i don't know about wall street. >> of course, there are differences. what i found interesting, talk to them and they will say in the abstract, those who got rich period by manipulating the government are very bad. i am not one of them. even the russian and oligarchs see the world that way. i made my fortune but not be -- but not the others. even the americans. they feel the most righteous and they should.

they love to criticize wall street. they see a clear line but having said that, as soon as they have the power to become a monopoly they become one. they have to be careful about falling into black sheep way she. this is why i am suspicious of that analysis not worried about the underlying economic forces. face the cad and investor called and announced how many people they had employed at the end of the third quarter. 4,300. facebook employed 4,300 people. what is happening to the

middle-class that fact tells you one holla lot not because anybody is bad the economic force ripping through society. [applause] ag for coming. as a mechanism to mayor bloomberg the said the damage was unprecedented, and maybe the worst dorm list form surge was 10 feet this time 14 governor crist christie said unthinkable, fires, a hurricane force winds winds, massive flooding,

look at that to the subway system and the shutdown of the stock exchange you get a sense of the scope of the storm but yet i have read dozens of stories how for many consumers the only link four tie to information is through their smart phone. and social media. there was an impact the that works performed very well. >> some networks did well others did less but we don't have solid information because there is no reporting requirements or a standard by which we measure and it is voluntary if they want to talk to their local governments. i have anecdotally heard maybe some did less well and

the first up is who did well and who didn't and how we make sure everybody does well. >> the impact of super storm sandy on telecoms indicators. on "the communicators."